RE-ENTREPRENEURING - Roland Berger

RE-ENTREPRENEURING

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BLOOMSBURY BUSINESSBloomsbury Publishing Plc

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Dedicated to all the Roland Berger partners who have made re- entrepreneuring part of what we do every day and helped our clients succeed. Without you this book would not have

been possible. Thank you.– Charles-Edouard and Stefan

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RE-ENTREPRENEURING

How organizations can reignite their entrepreneurial spirit

ROLAND BERGER PARTNERS

Co- editors: Charles-Edouard Bouée and Stefan Schaible

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Preface x

Introduction 1

1 Reculer pour mieux sauter 11

The emergence of TUI 13

How should an incumbent respond? 22

Summary 23

2 Re- start: Finding opportunities in discontinuities 25

bibliotheca and 3M Library Systems: The best of both worlds 27

Changes of state 30

Deutsche Post: Staying relevant and competitive 31

The virtue of crises 35

Each case is unique 36

Entrepreneuring and managing 37

A shot of entrepreneurial energy 38

Summary 40

3 Re- structuring: New configurations, new beginnings 41

Ford of Europe: Restoring profitability 42

Zain Saudi Arabia: Winning through caring 45

SMA Solar Technology: The sun will come out tomorrow 50

bauMax: Error correction 53

Restructuring with an entrepreneurial eye 56

CONTENTS

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viii CONTENTS

No exit 58

Ruhrkohle: A painless death 58

Summary 61

4 Re- form: Re- entrepreneuring in non- entrepreneurial contexts 63

Russian Railways: From platforms to ‘platform’ 64

Treuhandanstalt: Reviving East Germany’s corporate sector 67

German labour market reform 72

Entrepreneurs everywhere 75

Kant’s rules of bureaucratic re- entrepreneuring 77

Summary 78

5 Re- conceiving: Finding value beyond the core 79

To infinity and beyond! 80

Mannesmann: An inspired step in the dark 82

Migration to value 85

Open- minded organizations 87

Summary 88

6 Re- model: Renew your business model before you have to 89

Michelin comes around 90

Toyota: Improving the human/organization interface 93

Denso: Improving the ‘continuous improvement’ philosophy 95

Re- entrepreneuring ecosystems 97

BGI: Taking control of your destiny 99

Summary 104

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ixCONTENTS

7 Re- organize: Chaotic environments, agile structures 105

Rules of the game 106

Vivo: How a dark horse got ahead 110

Didi Chuxing’s ride to the top 114

Summary 119

8 Re- envision: Imagining and creating limitless possibilities 121

Neokidney: The re- entrepreneuring of a charity 122

Begin with a hypothesis 129

Opportunity hunting 130

Summary 131

9 Own the future: Don’t ask what tomorrow might hold. Imagine it. Make it happen. 133

Projects first, then cultures 134

Oticon’s spaghetti management 135

A tale of two cultures 144

Organizing work 146

The principles of re- entrepreneuring 147

Summing up 151

10 Epilogue 153

Notes 159

Sources 161

Index 165

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PREFACE

In today’s fast- paced world, a half- century is a long time. It is many

lifetimes rolled into one. And this fact came to light when discussions

began within Roland Berger, our consultancy firm, about how to

celebrate the 50th anniversary in these days. The first few suggestions

were predictable: we could mark our Golden Jubilee with a big party

for current employees, their families, and our alumni. Or we could

produce a glossy book, telling the story of our first 50 years with

pictures of our people, beginning with our founder and progressing

through the subsequent generations to ourselves.

Fifty years is a long time. We have added many feathers to our cap,

weathered many storms and come out stronger. The Roland Berger of

today is not the same as the Roland Berger of yester- years. The

conversation took a more serious turn when someone asked what had

changed in the half- century since our founder had set out his stall as

a consultant for German organizations re- establishing themselves in

the aftermath of World War 2.

We saw the period as consisting of several waves of change: the

globalization wave of the 1970s, the personal computer wave of the

1980s, the mobile phone and Internet wave of the 1990s, the wave of

the smartphone and the ‘platform’ business model in the first decade

of the new millennium, and the current wave, which cannot yet be

characterized, but which could be seen in some ways as a prelude to

the coming age of artificial intelligence.

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xiPREFACE

There was also a world of difference between the kind of work we

did for clients, such as the German tourism group TUI, in the firm’s

early days and the kind of work we have been doing recently for

clients such as Chinese smartphone suppliers OPPO/Vivo.

This led to the question of what, if anything, had stayed the same

during Roland Berger’s first 50 years.

The idea that led to our decision to write this book was that in

helping organizations to preserve and create value we have been

concerned, since the beginning, with the sources and uses of human

energy.

Organizations have lives of their own that transcend those of the

individuals who comprise them. But without the energy of the

individuals who pass through them, they could not act, or react, to their

constantly changing environments and the successive waves of change.

This energy takes many forms, ranging from human passions for

quality, elegance, speed and lean- ness, to qualities such as determination,

loyalty, resilience and a refusal to take things as they are for granted.

Of all the forms of human energy that give life and vigour to

organizations, entrepreneurial energy, the search for, and pursuit of,

new opportunities to create value, is the prime mover. It gives birth to

organizations in the first place, and is the only kind of energy that can

renew and refresh an organization when changes in its environment

demand an adaptive response.

Although we didn’t always recognize it at the time, we realized that

in most cases, it was this powerful entrepreneurial energy, which

loosens and re- shapes, that we had been using in our assignments for

companies, national and local governments, and non- governmental

organizations (NGOs).

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xii PREFACE

We didn’t conclude from this, however, that we or our clients were

‘entrepreneurs’ in the normal sense of the word. In popular culture,

the archetypal entrepreneur is a free agent who starts his or her own

business either from scratch or as a spin- off or spin- out from an

existing organization. Entrepreneurial energy in this personified form

was not available to us or our clients, which are usually established

organizations. But although we ourselves were not entrepreneurs, we

realized that during assignments we and our clients often adopt the

entrepreneurial outlook and behave in ways that have the hallmarks

of entrepreneurialism.

It seemed to us that, without being conscious of doing so, we and

our clients had succeeded in overcoming daunting obstacles by

reaching back to the organization’s origins, recapturing the then-

dominant entrepreneurial outlook, and bringing it to bear on the

challenges of today. We had managed to detach entrepreneurship and

entrepreneurial energy from the person of the entrepreneur.

If we could bottle it and apply it at will, we would have the

equivalent of an elixir of corporate youth that could be injected into

organizations that were struggling to adapt to their changing

environments. We had the impression that the need for such a tonic

had been growing in recent years, because of what we call the VUCA

factors or qualities (Volatility, Uncertainty, Complexity and

Ambiguity) that have come to characterize the modern environment.

This book is an attempt to distil this entrepreneurial energy by

looking back and re- interpreting some of the work that our more than

200 partners, 2,500 consultants with help of all our employees, and

thousands of alumni have done for clients over the past half- century.

We don’t claim we are the only firm to use this energy, but we believe

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xiiiPREFACE

that we are among the first to recognize it for what it is: a juvenile

form of creative energy that gets organizations going in the first place,

but which they tend to lose access to as they develop.

The idea of ‘re- entrepreneuring’, as we call these injections of

entrepreneurial energy, was triggered by the chance combination of

developments and circumstances. The 50th anniversary discussions

were part of it. At the same time, interest in the ‘Light Footprint

Management’ model we had proposed in 2013 (0.1), which urged

organizations to recapture the agility of their youth, remained high.

Third, we had been having some success in the market, with a new

approach to restructuring that we had called ‘entrepreneurial

restructuring’.

These three themes came together in discussions with partners

working in various industries. They focused attention on our own

origins and on the idea of looking back to when organizations were

younger, smaller and lighter on their feet, for inspiration about how to

move forwards. Partners came up with many examples of where this

general approach had been taken, some of which are described in the

pages that follow. They emphasized that it wasn’t a matter of literally

going back and starting again. It was a matter of re- discovering

entrepreneurial energy, and applying it to the current situation. Re-

entrepreneuring differs from traditional consulting in that it is not a

prescription or a remedy, but a re- awakening of dormant faculties,

much as immunotherapies awaken immune systems.

The prefix ‘re-’ in words such as restructuring, re- forming, re-

viewing and re- inventing, seemed an important theme to us, because

it conveyed a sense of returning, and repeating an action that had

been done before. If ‘entrepreneuring’ is what people do when they

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xiv PREFACE

create organizations out of nothing, ‘re- entrepreneuring’ is the

application of the same creativity to assets and capabilities that already

exist. It is re- arranging these assets and capabilities so that they can be

used to seize new opportunities, and confront new challenges. From

there, it was a small step to the conclusion that, to adapt to a VUCA

world, organizations must learn the art of ‘re- entrepreneuring’.

This book is a collaboration – a joint exploration by members

of a large global consulting firm of the implications for modern

organizations of current trends and adaptive pressures. It is the

creature of our own entrepreneurial energy, as we adapt ourselves,

and our services to clients, to the threats and opportunities that lie in

wait for all of us. Before we end, we would like to express our deep

gratitude towards Tom Lloyd who helped us sift through nearly 50+

complex case studies and articulate the ideas presented in this book.

Charles-Edouard Bouée and Stefan Schaible

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1

Reculer pour mieux sauter

All companies begin with an entrepreneurial act, but successful

companies usually lose that youthful impulse over time. As the firm

becomes an institution, managers’ concerns typically shift to

preserving the company’s franchise. They begin to pursue a more

conservative strategy, doing more of whatever won them their initial

success. They add tangible assets (plant, buildings, cash, inventory,

etc.), develop intangible assets (intellectual property, reputation,

structure and culture), and extend their distinctive ecosystem of like-

minded partners and vendors.

Sooner or later, however, the times in which the company found its

original niche begin to change. Maybe the market declines and a set

of key customers move on. Maybe new competition reduces the

profitability of the old business model. Or maybe technology

eliminates the profitability of an entire industry, destroying the value

of formerly prized assets and expertise. In any case, executives realize

that their winning formula does not seem to win quite so often

any more.

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12 RE-ENTREPRENEURING

Now the company must reinvent itself. If it is to thrive again,

managers will need to find some entrepreneurial instincts within

themselves or recover a dormant entrepreneurial impulse from the

company’s youth. Then, looking at their current assets and liabilities,

and after thinking through the true mission of their business, they

make a decision about where the firm will go from here. We call this

process re- entrepreneuring.

The French saying reculer pour mieux sauter (step back, to go forward

more strongly) sums up the idea. To cross a stream, you don’t step into

it; you retrace your steps, run at it and jump across. Similarly, we find

that despite all the new opportunities created by technology, the

solutions to the key problems the organization faces today or anticipates

facing tomorrow often lie in its past. In particular, they lie with those

entrepreneurial qualities that were considered relevant at an earlier

stage of the organization’s development but have atrophied in maturity.

Entrepreneuring by its nature is a youthful act. Howard Stevenson,

Emeritus Sarofim-Rock Professor at Harvard Business School, defines

‘entrepreneurship’ as a ‘pursuit of opportunity without regard to

resources currently controlled’. Entrepreneurs ‘see an opportunity

and don’t feel constrained from pursuing it, because they lack

resources. They’re used to making do without resources’. (1.1)

Re- entrepreneuring is an older and wiser version of the same act.

In many ways, it is a braver one, as the leaders making the new bets

understand more clearly all that is at risk. It entails nothing less than

the innovative realignment of an existing set of assets and processes in

pursuit of a new opportunity or to create new value.

As we shall see in the following case of TUI, the German travel

giant, sometimes companies survive this phase by acquiring new

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ReculeR pouR mieux sauteR 13

assets. Other times, as with Apple and the iPod, they win that new

lease on life by creating new products. Either way, the essential quality

of re- entrepreneuring is that it is not a matter of thinking ‘outside the

box’ – it is about thinking with the box, applying the company’s

existing assets and distinctive qualities to a new purpose, using the

box itself as a stepping stone that will carry the company across a

difficult time to a better time.

The emergence of TUI

The Great Depression tanked many businesses, but those that survived

went on to prosper. One unlikely survivor was Dr Tigges-Fahrten, a

holiday company founded in 1928, just before the stock market crash.

The recession was not the best of times for leisure and entertainment

businesses, but Tigges-Fahrten sailed through by smartly focusing on

budget tours. It wasn’t smooth sailing all along though, and the

business had to go into a hiatus during World War 2. Despite the

adverse circumstances, it continued to adapt its strategy and by 1953

it had organized its first air tour and, over the next decade, it had

diversified well beyond Europe and organized its first world tour.

At this time, the firm came to realize that the future of tourism was

in air travel, and that this would demand a different kind of business

organization. Buses were cheap. Airplanes were not: air tours were

cash- intensive because of the need to pre- book seats for chartered

flights. But to succeed, substantial financial and organizational

resources would be needed to operate on a scale the market had begun

to demand. Only a larger company could maintain the necessary level

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of working capital to keep the business afloat. To prepare for these

new conditions, Tigges merged with Touropa and Scharnow-Reisen

and, later, a long- standing joint venture partner, Hummel Reisen. In

1968, the four companies rebranded themselves as ‘Touristik Union

International’ (TUI).

The team designed a robust management structure that would play

to the strengths of the constituent companies’ leaders, and the TUI

group adopted a full- range approach to cover all segments of the

market.

Each constituent company concentrated on those segments in

which it had a competitive advantage – Tigges: study trips, expeditions

and adventure tours; Hummel, Scharnow, Touropa: sport trips;

Scharnow, Touropa: health and convalescent trips. The aim was to

sharpen the focus of the group companies, reduce competition

between them and, by working together, offer a range of products that

covered the most lucrative segments of the market.

By adopting the holding company model, TUI aimed to achieve

substantial cost savings by taking over administrative tasks from the

four companies so that they could focus their attention on the

operations. Central units were formed for accounting, review, tax and

materials purchases. A group marketing department, supplying

market research, advertising, and sales promotion services was also

developed. As these services did not differentiate each company’s

offering, they could be centralized to save costs.

But differentiation was still necessary in the product ranges, and so

the managing directors of the individual brands retained the

responsibility for their tour line- ups. In this way, TUI distinguished

between ‘initial’ (entrepreneurial) creativity, which was the

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responsibility of the group companies, and ‘selective’ creativity, such as

brochures and advertisements, which fell under the purview of central

management.

The merger worked. In 1969, annual customer numbers exceeded

a million for the first time, and services and product lines were

extended.

Over the next two decades, TUI continued to expand its portfolio

of high- quality travel products and services. In 1970, it formed its

travel services division, TUI Service, and substantially increased the

range of services offered by its operators. The broad spectrum of

packaged and individual trips by air, train, car and ship was

complemented by new holiday formats ranging from club holidays

and stays at country farms, to trips to nudist beaches for sunbathers,

tennis and sport centres, and a special youth travel programme,

‘twen- tours’.

The company launched a joint venture as well that would prove

significant in the coming years. In 1971, TUI, Germany’s airline,

Lufthansa, and the Bundesbahn (the state- owned rail network)

formed a joint venture to develop a new electronic booking system.

In the early 1970s, TUI also stepped into the hotels and hospitality

business by laying the foundations of the Robinson Hotels brand along

with Steigenberger Hotelgesellschaft. The first Robinson Club – the

Jandia Playa – was set up in Fuerteventura in 1971. Then in 1972, TUI

acquired Iberotel, the Spanish hotel chain.

This ‘merger strategy’ proved to be the right one. By creating

communalities of challenges and solutions, it allowed TUI to stand out

from the mass in a more and more competitive market. Several decades

later, TUI has changed, of course. But it is still operating in this

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‘re- entrepreneuring’ mode, relying on effective governance and efficient

back- office functions, and with a strong focus on content, at a time

when tourists are looking for authentic and personal experiences.

Another company that has been strong with its re- entrepreneurial

instincts is Apple. Apple entered its ‘re- entrepreneuring’ stage shortly

after founder Steve Jobs walked back into Apple’s headquarters in

January 1997, 12 years after being fired as CEO. (1.2)

First, he took a step back. He cut Apple’s product line back by 70

per cent, eliminating problematic products such as the Newton, a

precursor of the Palm Pilot and the other Personal Digital Assistant

electronic note- keepers, and cut the workforce as well by about 3,000

employees, out of a total of 11,000. ‘Deciding what not to do is as

important as deciding what to do,’ he later explained. ‘It’s true for

companies, and it’s true for products.’

Then, he took a surprising step forward, one that would transform

both the computer business and the entire music industry – but not

without a little wobbling on its back foot first.

In the late 1990s, the popularity of online music exploded, as

consumers began to take advantage of the digitalization of music that

had begun in the 1980s with the mass adoption of the compact disc

(CD). College students, and later other music listeners, learned to

share music files. Napster and a number of file- sharing sites attracted

millions of followers. In the year 2000 alone, 320 million blank CDs

were sold in the US, which consumers used to store music they had

‘ripped’ from Napster and other file- sharing sites. A new era in digital

entertainment had begun, but without Apple.

The catch- up campaign began with the addition of a CD burner on

the iMac, but that was not enough. Jobs wanted an MP3 player. To the

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techno- zen culture nurtured by Jobs, the MP3 players then on the

market were clunky, ugly and seriously lacking in storage capacity.

Jobs and his colleagues listened to a lot of music and knew what ‘good’

would look like in an MP3 player: elegant, easy to use, and capable of

storing a 1,000-song playlist.

As he had with the Macintosh computer nearly 20 years earlier,

Jobs and his team looked at the clumsy, inelegant technology and saw

a transformational opportunity.

This time around, however, they had more than the eye for design

and obsession for quality they had in 1984: they realized that they

already owned some of the key elements of an entire new music

ecosystem.

Apple already had the key component in FireWire (an IEEE 1394

serial port), which it had developed a decade earlier to transfer files

from one device to another. It was just a matter of reaching back, and

deploying it in new applications.

Apple had also already launched its own music service, through

another act of re- entrepreneuring: the company had found a music

file- sharing start- up run by three members of its alumni network.

They recognized that SoundJam could be designed to be more

attractive than Napster and the other pirate music sites. Apple

acquired and then rebranded SoundJam as iTunes in early 2001,

releasing it as an application free to all Mac users.

It also went beyond the other file- sharing sites at the time by

creating a legal market for online music that hadn’t really existed

before, giving Apple a new role in the music business as a retailer.

The decision to develop what became the iPod was a violation of a

time- honoured management axiom that a company should stick to its

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knitting. But Jobs and his team understood that Apple’s true value was

not as a computer company, but as a maker of consumer- friendly

digital tools. By going back to Jobs’ initial understanding that

consumers would respond to elegant, easy- to-use design in an

aesthetically pleasing appliance, and that Apple’s core value lay in

delivering such beautiful machines, they found a vast new opportunity,

setting the company on a new path that led straight to the iPad and

then the iPhone and the iPhone Appstore, creating two vast platforms

for digital content that completely realigned electronics, media and

entertainment.

At some point, almost every company faces a variation of the kind

of challenge faced by TUI and Apple – a changing world in which

they are on the verge of losing their niche. What is different today is

that even relatively young companies are facing what tended to be

more of a mid- life crisis.

Vijay Govindarajan and Anup Srivastava, professors at Dartmouth

College’s Tuck School of Business, analysed all 29,688 firms that listed

from 1960 through 2009 and found that failure is more common in

newly listed firms as opposed to older ones. They write, ‘A company

listed before 1970 had a 92 percent chance of surviving the next five

years, compared to just 63 percent for a company listed between 2000

and 2009.’ (1.3)

Reasons are not hard to find: the environment is changing faster

than ever. With the arrival of the personal computer (PC) in the

1980s, the Internet, the smartphone, and the exponential growth of

data substituted for the steam engine, we find ourselves in the throes

of a similar transition in the adaptation of our organizations to their

changing environment. And with artificial intelligence (AI) and

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further dramatic advances in microbiology just around the corner, the

adaptive pressure can only become more intense.

Often, the effects of these pressures take a little while to make

themselves felt. Not much happened in organizational design during

the initial PC wave, when IBM and Hewlett-Packard were the

pioneers, but new business models and organizational structures

began to emerge when the baton passed to a host of ‘IBM-

compatible’ new entrants, such as Compaq and Dell. The typical

pattern, displayed by the railways in the nineteenth century and the

automobile industry in the twentieth century, is an initial proliferation,

followed by consolidation, as natural selection (competition) winnows

the host of new entrants down to a few survivors (e.g. Apple and

Microsoft, in this case).

The same pattern unfolded during the commercialization of the

Internet. In this case, the novelty of the ‘space’ being colonized by the

horde of new entrants led to more organizational innovation from

the outset, but pioneers, such as AOL and Yahoo, didn’t stay the course.

The initial proliferation was christened the dotcom boom and

culminated in the upstart new economy AOL acquiring a pillar of the

old economy, Time Warner, in early 2000. The NASDAQ index peaked

at 5,133 on 10 March 2000. The bursting of the dotcom bubble pushed

the NASDAQ down 78 per cent by the end of 2002. In the tumult that

followed, many companies simply vanished, while others saw their

stocks plummet. Cisco, for instance, which in the year 2000 surpassed

Microsoft to become the most valuable company in the world, saw its

share price fall by a whopping 86 per cent after the dotcom bust.

The pioneers in the early days of mobile telephony too went

through the same process. Motorola, Nokia, Blackberry and Ericsson

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began as the industry’s leaders, but lost their way with the arrival of

the smartphone, when Apple, then Samsung, Huawei, OPPO/Vivo

and Xiaomi took over the market (see page 110).

It is safe to say that the same pattern of pioneering, followed by

proliferation and consolidation, will probably repeat itself in the

coming artificial intelligence revolution.

Are pioneers doomed to fall by the wayside as the products or

markets they create are ‘commoditized’, or otherwise transformed,

and their organizational structures or business models cease to be fit

for purpose?

We do not believe so, but there is no denying that the adaptive

pressure is increasing on all organizations, and it is clear that the

traditional corporate structure is itself under pressure.

Advances in information and communication technologies in the

170 or so years since the modern company first made its appearance

have reduced transaction and information costs almost to zero, and

have dramatically increased the efficiency of inter- firm coordination.

Some say that net transaction costs may now even be negative

sometimes, because the connection costs less now than the value they

add to a firm’s network capital and reputational assets. At the same

time, the growth of outsourcing, joint ventures, alliances, partnerships

and other kinds of co- operation, which gives globalization its

substance, suggests that, in some sectors, traditional top- down

organizing no longer makes much sense.

What next? As Nobel Laureate molecular biologist Jacques Monod

said, evolution in nature is driven by a combination of ‘chance and

necessity’. (1.4) Today, partnering and co- operation have become so

common that it makes more sense to think in terms of business

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ecosystems, rather than integrated companies, consisting of value-

chain neighbours and trusted suppliers and customers. Each member

pursues its own goals, but in so doing imparts a collective direction to

the ecosystem as a whole, much as ants exhibit ‘swarm intelligence’.

Some have suggested that an ecosystem of this kind, consisting of

Microsoft and the PC clone makers, such as Compaq and Dell,

unintentionally destroyed IBM’s PC business.

Another development that is undermining the cultural intensity of

large companies and other organizations is the increase in the mobility

of their personnel. Employers began to repudiate the old job- for-life

social contract that used to be the norm in the corporate world in the

downsizings and delayerings of the early 1990s. The consequence is

that few people now envision their career as a steady climb up one

organization’s hierarchy. The increased mobility of managers is also

attributable in part to a proliferation of specialities – finance,

operations, marketing, manufacturing, ICT, HR – which have led to

a shift in focus away from loyalty to an organization to one’s profession.

The loss of control over individuals has followed in step with a loss

of control in most industries and economies of their market. As trade

expands, the market power of individual companies falls, and

instruments of market control, such as IP protection, have become

less effective.

Over the past few years, a new shift in power has been underway

and, again, large established companies have been conspicuous by

their absence, with Airbnb, Alibaba, Didi Chuxing, Facebook, PayPal,

Tencent, Twitter and Uber taking the lead. Digital technologies favour

entrepreneurs, because they allow them to scale- up rapidly through

network effects, adopt agile business models and keep costs low.

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How should an incumbent respond?

The word entrepreneur is a noun: to be more specific, a person. If real

entrepreneurs were as thin on the ground as most people believe, it

would be fruitless to suggest, as we intend, that they are a solution to

the problem of adaptation, at the firm- level. They can help an economy

to adapt, but if they are rare, they are unlikely to be available to a

particular organization.

But suppose entrepreneur was a verb. What would it mean

‘to entrepreneur’ and how much ‘entrepreneuring’ is, or could be

going on?

Although serial entrepreneurs addicted to the new and the risky

are rare, everyone can adopt the entrepreneurial outlook or approach

when contexts permit or circumstances demand.

The interesting question for organizations, then, is not how few

full- blooded entrepreneurs there are, but how common, how

accessible and how easily invoked are their approaches, outlooks and

qualities.

From this we can derive a definition of ‘entrepreneuring’ for our

purposes: A way of thinking and acting that takes nothing for granted,

is unconstrained by any resource considerations and seeks opportunities

not previously identified to create value as quickly as possible.

The argument we will make in this book is that the winners in the

world we live and work in today will be organizations that focus their

entrepreneurial instincts in a way that does not disregard their current

assets. Jobs’ return helped invoke the entrepreneurial instincts that lay

buried deep in Apple’s DNA but had been lost over time. Tigges never

hesitated to face the changing travel market and adjust itself to meet

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its needs. But it need not involve a reclaiming of the past so much as

clear- eyed sense of the company’s present.

Many organizations mistakenly assume that in order to progress

they must look at reviving the start- up mind- set, and ignoring the

strengths and capabilities they have grown over time. As a result, they

experiment with start- ups. They either develop initiatives such as

incubators or intrapreneurship programmes, or invest through

corporate venture funds in promising start- ups. Both ways have

important drawbacks. In the first case, ‘intrapreneurs’ often lack a real

sense of autonomy that allows them not only to improve the existing

models, but also to explore new growth opportunities. Conversely,

externally, direct investment in promising start- ups does not rely on the

company’s strengths, and that then leads up to another challenge: that

of integrating the entrepreneurial ventures into the main organization.1

You won’t win by forgetting who you are now and ‘going back to the

garage,’ but you might if you take a clear look at your company, its

circumstances, and your opportunity with candour and a discerning eye.

SUmmARyl Reaching back can illuminate the way forward.

l ‘Entrepreneuring’ means to act in an unconstrained way and create value that did not exist before.

l We can all engage in entrepreneuring in the right circumstances.

l ‘Re- entrepreneuring’ rejuvenates established organizations.

l It is the organization’s primary adaptive mechanism in a volatile and uncertain environment.

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RE-ENTREPRENEURING - Roland Berger

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